Portable Retirement Funds Will Cut Lost Pensions, U.K. Says

July 17 (Bloomberg) -- U.K. plans to make it easier for
workers to take their pension pots with them when they change
jobs were published today.

The changes will cut the number of lost pensions and give
greater clarity on retirement expectations, pensions minister
Steve Webb said in an e-mailed statement. Unclaimed pensions are
valued at a total of 3 billion pounds ($4.7 billion), the
Department for Work and Pensions said, citing its own research.

“We need a system where people build up worthwhile pension
pots in one place rather than having lots of small pots all over
the place,” Webb said. “At the moment, every time someone
moves to a new job there is a risk that they leave behind a
small pension pot which they lose track of. Our plans will mean
that individuals get better value for their savings and bigger
pensions as a result.”

Auto-enrollment into pensions, which starts this month,
will be “undermined” if the funds are not portable, Webb said.

The “pot follows member” approach should halve the number
of dormant pension pots by 2050, the department said.